Ironman is the alias of the blogger at Political Calculations, a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics. We should acknowledge that Ironman is either formerly or currently, and quite possibly, simultaneously employed as some kind of engineer, researcher, analyst, rocket scientist, editor and perhaps as a teacher of some kind or another. The scary thing is that's not even close to being a full list of Ironman's professions and we should potentially acknowledge that Ironman may or may not be one person. We'll leave it to our readers to sort out which Ironman might behind any of the posts that do appear here or comments that appear elsewhere on the web!
April 18th is U.S. Income Tax Day in 2017, and what better way to mark the day that all Americans' income taxes are due than by providing another form for you to fill out!
Why would you want to do this? Because if you don't, you'll never know just how much you would have been taxed when the original Form 1040 was first issued by the IRS back in 1913....
Our tool below is based upon the first page of the original Form 1040, which originally consisted of just four pages: the summary sheet modeled below (Page 1), the Gross Income calculation sheet (Page 2), the General Deductions sheet (Page 3) and finally, one page of Instructions (Page 4). Yes, you read that right. Just one page of instructions!
We'll make it just a bit easier still. All you need to do is to enter the indicated data (shown in boldface type) below with your figures from this year, and we'll take care of the math:
|IRS Form 1040, Circa 1913|
|Return of Net Income Received or Accrued During the Year Ended December 31, 191_|
|1. Gross Income (see page 2, line 12)|
|2. General Deductions (see page 3, line 7)|
|3. Net Income|
|Deductions and exemptions allowed in computing income subject to the normal tax of 1 per cent.|
|4. Dividends and net earnings received or accrued, of corporations, etc., subject to like tax. (See page 2, line 11)|
|5. Amount of income on which the normal tax has been deducted and withheld at the source. (See page 2, line 9, column A)|
|6. Specific exemption of $3000 or $4000, as the case may be. (See Instructions 3 and 19)|
|Total deductions and exemptions (Items 4, 5, and 6)|
|7. Taxable Income on which the normal tax of 1 per cent is to be calculated. (See Instruction 3)|
|8. When the net income shown above on line 3 exceeds $20,000, the additional tax thereon must be calculated as per schedule below:|
|1 per cent on amount over $20,000 and not exceeding $50,000|
|2 per cent on amount over $50,000 and not exceeding $75,000|
|3 per cent on amount over $75,000 and not exceeding $100,000|
|4 per cent on amount over $100,000 and not exceeding $250,000|
|5 per cent on amount over $250,000 and not exceeding $500,000|
|6 per cent on amount over $500,000|
|Total additional or super tax|
|Total normal tax (1 per cent of amount entered on line 7)|
|Total tax liability|
3. The normal tax of 1 per cent shall be assessed on the total net income less the specific exemption of $3,000 or $4,000 as the case may be. (For the year 1913, the specific exemption allowable is $2,500, or $3,333.33, as the case may be.) If, however, the normal tax has been deducted and withheld on any part of the income at the source, or if any part of the income is received as dividends upon the stock or from the net earnings of any corporation, etc., which is taxable upon its net income, such income shall be deducted from the individual's total net income for the purpose of calculating the amount of income on which the individual is liable for the normal tax of 1 per cent by virtue of this return.
19. An unmarried individual or a married individual not living with wife or husband shall be allowed an exemption of $3,000. When husband and wife live together they shall be allowed jointly a total exemption of only $4,000 on their aggregate income. They may make a joint return, both subscribing thereto, or if they have separate incomes, they may make separate returns; but in no case shall they jointly claim more than $4,000 exemption on their aggregate income.
Well, wasn't that a fun exercise! Are you ready for the "improved" modern version of the same thing now?
Or if you're up for a real challenge, you could try your hand at designing an even simpler tax code for Americans this year and beat President Trump while you're at it!